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Lenders postpone timeline for Reliance Capital Ltd resolution by two months

Reliance Capital resolution

Lenders extends timeline for Reliance Capital resolution by 2 months

Lenders of indebted Due to the lacklustre interest from potential buyers, Reliance Capital Ltd (RCL) Resolution agreed on Sunday to extend the resolution process deadline by an additional two months, until November 2. 
 
From June 3 to September 2, 2022, the deadline was already already extended by 90 days. The Committee of Creditors (CoC) has extended the deadline for RCL’s resolution procedure a second time. 
 
The Administrator was required by the Insolvency and Bankruptcy Code (IBC) regulations to complete the resolution of RCL within 180 days, or by June 3. 
 
The CoC also resolved to move up the deadline for prospective bidders to submit their resolution plan from June 20 to July 11.

Reliance Capital resolution

According to reports, a few potential bidders wrote to the administrator requesting more time for the filing of the resolution plan, hence the deadline for that submission has been extended. 
 
According to the sources, Piramal Enterprise asked to extend the deadline to August 10 while IndusInd Bank asked to extend it to July 15. 
 
The sources claim that because of the bidders’ lack of interest, the deadlines for finishing the resolution process and submitting the resolution plan have been extended. 
 
Only a small number of bidders are currently in contact with the administrator out of the about 54 expressions of interest (EoI) that were initially submitted, according to the sources, who also noted that lenders had given bidders two alternatives.

Bidders and Subsidiaries

Bidders were permitted to purchase RCL and its eight subsidiaries under the first option. This option has been chosen by Torrent Group, Yes Bank, and Piramal Enterprises. 
 
In light of payment defaults and significant governance difficulties, the Reserve Bank of India (RBI) replaced the Reliance Capital Ltd (RCL) board on November 29 of last year. 
 
In connection with the company’s Corporate Insolvency Resolution Process (CIRP), the RBI named Nageswara Rao Y as the administrator. 
 
The central bank recently began insolvency procedures under the IBC against a third sizable non-banking financial firm (NBFC). Srei Group NBFC and Dewan Housing Finance Corporation were the other two (DHFL).